You might think that custom software is a hearty expense that will cost your business an exorbitant (and unnecessary) amount of money without providing a valuable return on investment.
Well, it turns out that investing the time, money and energy into developing custom software for your brand actually does provide a better return on investment and foster long-term business growth – perhaps because one size rarely fits all.
DesignRush sat down with top software development company Syberry Corporation to learn how investing in custom software can ultimately save brands money, the pros and cons of custom software, how to determine if custom software is right for you, and more.
Why Every Brand & Industry Needs Custom Software
Every modern business relies on some form of software to run their business efficiently. This could come in the form of:
- Financial tracking
- Inventory lists
- Customer relationship management systems
- Websites and mobile apps
- And more!
Custom software helps to build a trustworthy customer-brand relationship and to maintain an efficient workflow between employees and departments – and automation through software makes that even more possible!
Now, businesses can save money upfront by foregoing customized software in favor of a stock template.
However, it is important to note that investing more money in custom software will likely lead to faster and more effective business growth after the product goes live.
Just like the saying “the bigger the risk, the bigger the reward,” often the more money invested in high-quality software, the better the return on investment.
In fact, over 52% of businesses have outsourced their software development – and nearly 80% were satisfied with the results.
The Pros and Cons of Custom Software Development
Just like anything in the business world, custom built-from-scratch is not the right choice for everyone. Syberry Corporation noted the leading pros and cons of custom software development. In short, the main advantages of custom software are represented in the following diagram:
But it makes sense to talk about each item in more detail.
Pro: Custom software ensures that you have complete ownership over your platform. You don’t have to pay any royalties, subscription fees or other hidden costs – which is always the case when you purchase a third-party subscription.
Because of this, companies owning custom software can quickly and easily alter it, add users, or make changes without running those changes through a third-party software host.
Con: As expected, customized software typically has higher upfront costs vs its off-the-shelf counterpart. But this quickly shifts to a pro when you remember how much better your return on investment will be down the road with the help of customized software.
Plus, you pay third-party subscription software fees as long as you use it, potentially forever. So, what’s really more expensive: the perpetual small fees over a long period of time or a higher upfront cost? This can be easily calculated, and usually custom software far more advantageous.
Pro: Customized software is tailored to a specific business and is completely scalable. It can be designed and developed to meet your immediate needs, help you achieve objectives, and position you for future growth without red tape.
Con: Customers who are investing in custom software also need to spend more of their own time working with a software development firm to build it by telling them what features they want, the goals they hope to achieve, and more.
However, this wait time can be shortened through proper planning and by partnering with a reliable software development company, ensuring customers see a big payoff down the road.
Pro: As we mentioned, software that is developed specifically for your type of business can improve your external relationship with users or consumers as well as boost internal efficiency. In many cases, it can be much more effective vs its off-the-shelf counterpart, because the latter targets a broader market user, and therefore does not consider 20-25% needs of a particular business, while customer software may cover up 100% nuances of the business that it was built for.
Con: The most important part of building custom software is choosing the right software development company to create it because essentially, everything depends on the level of quality and understanding that software company has in terms of your business and overall processes. Both vendors and clients need to manage the project efficiently, and continuously assess the resources needed to successfully develop customized software.
Luckily, by taking the time to find the best software development firm for your business, you’re far more likely to avoid failed development projects or “yes-men” who overpromise and underdeliver on services instead of providing healthy conversion and great results.
You can discover a good summary of this subject over on Syberry's blog!
Pro: Perhaps more importantly, custom software is, well, customizable, almost without limitations! It can be tailored to meet an internal or external objective that your company has. You can integrate specific functions, application program interfaces (APIs), third-party platforms, and technology that you want, while easily foregoing the ones you don’t need. This not only makes your business more efficient – it makes the systems you use more efficient, too.
But remember – when you’re integrating custom software to an existing solution, you should always rely on their efficiency (or inefficiency). Understand the program’s strengths and weaknesses before you integrate your system, so you know what to expect, and make sure you keep the external system’s functionalities intact.
Cons: Obviously, a downside of an excessively customized software is always an accompanying increased cost. The only cure from this is to clearly understand what your business needs at a specific point of time, and implement only that functionality, keeping the rest for later. We call it an “MVP”, a minimal viable product, i.e. that minimal set functionality which is feasible commercially or operationally at a certain moment of time.
How To Develop Custom Software For Your Company?
In order to create custom software that will benefit your business, you’ll need to enlist the help of a reliable software development company. Perhaps the most important first step of the project that professional software developers will assist with is the “Discovery phase.”
In custom software development projects, the Discovery process is the method of identifying business goals in relation to the software solution. In other words, you’ll be determining what you want to achieve, and how your new software will help you do it.
The ins and outs of Discovery may slightly differ, depending on a software development firm leading the process, but the main points remain the same.
A “product owner” from the client’s side, i.e. a person who understands the business side of the application, will be involved from start to finish. Software vendors usually provide a number of people to work on SRS (software requirements specification), SAD (software architecture documents), vision and scope (description of the objectives of a project), use cases (particular scenarios of usage of a system, with in-depth details), and UI//UX interfaces and graphic design, when necessary.
A set of deliverables for Discovery phase, as well as the vendor’s team, may differ from a vendor to vendor, but the core purpose stays the same – to supply a project with sufficient information to estimate the whole project, develop an approach, and start the actual implementation.
The Discovery phase – and all team members involved – is important because it creates a roadmap to the unknown destination in which you’re headed. The closest comparison is building a house or an industrial building without blueprints; you can imagine that the process, in this case, turns to be quite chaotic and typically leads to a disaster.
Omitting the thorough initial planning phase could, and most likely will, result in a project littered with mismanagement, revisions, unexpected costs, unfulfilled expectations, missed deadlines, and, ultimately, an unsuccessful piece of custom software that doesn’t work the way you envisioned.
Luckily, experienced software developers understand how imperative Discovery is, and take the time to invest time and energy into the process.
To summarize, accomplishing the Discovery phase will help you navigate the entire software development process successfully, including:
- Idea: Conceptualize the software or product you need.
- Business Analysis: Determine how it will benefit your business.
- UI Design/Prototyping: Create a prototype.
- Development: Code and develop the software.
- Testing: Test it to ensure it works properly.
- Deployment: Deploy the software and take it live.
- Maintenance & Support: Provide support to ensure it works to the best of its potential consistently.
So, What Is Off-The-Shelf Software?
Off-the-shelf software is a software product, designed and built to be sold as a ready piece of functionality, that covers a certain set of typical operations that need to be automated for an average business in that industry.
Such software applications are usually sold on a subscription-based basis, which implies that you get access to the functionality immediately upon paying fees per-user, or per-plan. These are typically targeted towards specific objectives, tasks or industries.
Although these solutions typically allow little or no customization, this type of commercial software can sometimes be personalized by a team of experts to suit your brand’s particular goals, too.
One-size-fits-all software can easily be compared to renting a home versus purchasing a home. Some people would rather pay a lease on a rental home their entire lives, which provides them with a landlord or management company who provides assistance and maintenance but ultimately offers no ownership. This approach is good as any other, as it allows certain flexibility by not owning an asset, and therefore not bearing large upfront investments.
Meanwhile, others prefer to purchase a home, which may require more work on their end but results in a tailored “product” that they own.
The most obvious benefit of readymade software is that it helps businesses to save money in the short run, without forcing them to forego the massive benefits that accompany software automation. However, the reality is that readymade software simply can’t compete with custom software when it comes to personalization, efficiency, and return on investment in the long run.
“Usually, the off-the-shelf solutions match about 75-80% of needs of a particular business,” says Timour Procopovich, Executive Vice President at Syberry. “It is designed this way because those providers try to match the most common pieces of functionality, and since the application is intended for many businesses, even if it is built for a specific industry, they match the majority of common needs, never all.”
In addition, the main disadvantage of ready solutions is that they do not contribute to the valuation of a company. The software is not your intellectual property – the owner of the software is the provider that you pay licensing fees to. However, having certain software assets can make your business much more valuable in the eyes of potential investors and customers.
“With readymade software, you’ll have to pay the fees for usage of the system as long as you use it – potentially forever,” notes Darya Yurevich, a Vice President of Operations at Syberry. “That said, at some point of not very distant future, the overall value of the investment into paying fees exceeds that which you could have spent on the custom system upfront. However, you would have been the owner of the custom software, making it an asset instead of a liability which you need to pay forever.”
How Do I Know If Custom Software Is Right For Me?
In order to understand if custom software is the right choice for your company, you’ll need to dig deep and answer some important questions regarding automation and customization.
- What is my budget to invest in the digital transformation of my business?
- How will this help my business, what would happen if I don’t implement anything in a short run and long run (1 year vs. 5 years, for example)?
- Is there an off-the-shelf software solution that exists that can achieve my goals?
- Will a custom solution be more successful and/or cost-effective?
Any business decisions can be broken down to simple numbers – the investments you make and the return on them over the reasonable lifespan of your business.
Yes, you can calculate the value of perpetual fees the well, but usually, businesses take a 10- or 20-years’ horizon. A non-monetary consideration is that if you don’t invest in new technologies, you may not have these 10 years as a business at all.
Also, please note that reinventing the wheel is simply not necessary in some cases. For instance, there are some third-party subscription-based software systems that are executed better than a customized version would be.
QuickBooks – one of the most popular bookkeeping and accounting programs – is an example of this in action. But to re-create QuickBooks, you need ten years and hundreds of millions of investments, so probably it’s better to use what is already out there when fulfilling such generic tasks.
Companies are obviously not going to waste time creating another QuickBooks just for themselves. However, they can build a custom solution to cover other needs of their business that QuickBooks can’t handle and integrate it with QuickBooks through an API.
Plus, it is possible to over-automate and over-customize your software, which runs the risk of reducing overall employee efficiency by minimizing the trust you place in employees over machines.
Syberry Corporation cites Tesla as a prime example of this mistake in action. The trendy car manufacturer aimed to build 5000 Model 3 electric cars each week in 2018, but failed to achieve even 50 percent of that goal because they relied too much on custom software and machinery and not enough on people who could manually run those tasks.
“Tesla could have hired a bunch of much cheaper people with screwdrivers to handle some more tricky functions and leave more basic and simple functions to the machines,” says Paul Vasiliev, Chief Technology Officer at Syberry. “We may see this same situation when certain custom solutions do not work. For example, in rare instances, at a certain period of time, it may be more cost-effective to use manual labor to keep functions working, or custom software solutions may not be scalable.”
Another reason that custom solutions (synonymous with custom software, in this example) may be unsuccessful could be because a brand may need to re-create processes from scratch.
Whether or not custom software will be a successful choice for your brand comes down to a simple comparison: What is more beneficial -- to pay a salary to a couple of people, even indefinitely, and keep struggling with inefficiency that is typical for processes that involve human labor or make a considerably large upfront investment and replace them to create a path for growth?
Syberry Corporation notes that if there is not growth, and so-called “economy of scale”, or a company is fairly small (and therefore a big upfront investment will never be sustainable, then a custom software investment isn’t the right choice.
But if brands answer these questions honestly and determine that they will benefit from custom software, the money they invested in the custom solution will be returned to them in the form of profits.
The Final Word: How Custom Software Can Save You Money
All in all, odds are that investing more money upfront in customized software may save you money in the long run for the following reasons.
- You’ll receive a better, more tailored product that will require less maintenance.
- You will not need to pay subscription fees.
- You will not need to pay additional fees to scale your software features as your brand grows.
- You’ll improve employee efficiency, both within and across many departments.
- You will foster a better customer-brand relationship, which increases revenue.
- You’ll be able to choose your own cutting-edge technology instead of being tied to a specific service provider and their technology of choice.